Global Data Regulations, Public Cloud Competition Pave the Path to Multi-Cloud in 2018

2017 saw huge growth in public cloud around the globe. Increased global data regulations, competition from Chinese public cloud vendors, a new focus on avoiding vendor lock-in amongst enterprise customers and new technology innovations will fuel the adoption of multi-cloud solutions in 2018. Here are top predictions from Cockroach Labs in 2018.

Increased Global Data Regulations Will Make 2018 the Year of Consumer Data Privacy

All of the sudden all around the world, like mushrooms sprouting after a big rainstorm, there are these incredibility opinionated and expensive data privacy regulations mandating that companies find out where your data is and controlling where that data lives, how it's used and its right to be forgotten. EU General Data Protection Regulations (GDPR) regulations, which come online in May 2018, are setting the standard. The penalties of ignoring these regulations are fines of $20M Euros or 4% of global revenue.

2018 will be the year of consumer data privacy. While enterprises are rolling out multi-cloud solutions to deal with growing data regulations, they will also need to address the issue from a database perspective. Database vendors, and the enterprises that use them, who ignore these regulations will face significant liability so expect to see huge investments in database technologies - from both vendors and in the enterprise.

More specifically, we'll see enterprises increasingly turning to distributed databases and inexpensive cloud services that are popping up in regions around the world to bring order to consumer data and bring, and keep, data closer to the customer. Open source tools and frameworks like Kubernetes and Docker will put these capabilities - that were once the domain of only the largest companies - within everyone's grasp.

2018 will see a marked increase in competition for public cloud dollars - and not just from incumbents like Amazon and Google. Big Chinese companies are making significant moves to expand their global reach - with Alibaba in particular moving aggressively into Europe and the United States. This will drive down public cloud prices and drive up demand for multi-cloud.

When you have a lot of competition and a huge incumbent, the competition will be undercutting on price. The biggest winners? Those enterprises that have invested or plan to invest heavily in public cloud.

The public cloud spend of a typical Fortune 500 can quickly escalate to 8 or 9 digits on an annual basis. Snapchat alone is paying hundreds of millions of dollars a year on Google cloud. Winning one of these big customers means big money and the competition for marquee contracts will just be heating up in 2018. And with so much competition, there is going to be opportunities for huge savings. No decision maker worth their salt is going to want to embrace a single cloud platform to the exclusion of all others. While some organizations might lock in a really good contract - we don't expect it will be with any of the big 3 unless they cut prices dramatically. But these forced price reductions will only further the cycle of cost cutting and drive enterprises to keep their options open.

Which leads us to our next prediction:

Vendor Lock-In Will be Cloud Issue #1 for the Enterprise

In 2018, the level of anxiety for decision makers at big organizations around vendor lock-in will continue to rise - replacing security as the #1 cloud concern.

While in 2018, most organizations will remain on a single cloud, they will be actively seeking out options to avoid being trapped on that cloud. We'll see more organizations moving away from expensive and limiting proprietary cloud storage technologies developed by Amazon, Google and Microsoft and embracing open source software solutions. As a result, it will be the beginning of a bad set of years for the highest price, stickiest services that are being offered by cloud service providers.

What's at risk for enterprises considering these proprietary solutions? Take Snapchat - a company that uses App Engine - a Google platform. App Engine is 10x more expensive for Snapchat than other solutions but they are stuck on the platform because to move away from it would mean rebuilding. This would require a huge investment in engineering resources and the potential of mass instability of their platform - which could drive away users. You'll see fewer and fewer enterprises falling into that trap in the future which is why we are seeing so much interest in multi-cloud strategies. Conversely, it will be a good year for tools that make it easier for enterprises to avoid vendor lock in - like Kubernetes and Docker.

Increased Scrutiny for Tech Hiring in 2018

The seemingly endless allegations of sexual misconduct in recent weeks make it clear that too many businesses have systemic deficiencies that perpetuate a toxic work environment. The pressure that has been building up due to recent news cycles will rebound to more scrutiny of everyone's hiring practices and corporate culture. Now it's time for technology companies to take action -- to make workplaces physically and emotionally safe and to establish a company culture based on respect.

Companies that think that it's not a problem for them are going to lose their best employees and fail to get the employees they need to hire. Tech companies need to come together and share ideas to create more inclusive and respectful culture. One way to do this is through open sourcing and making public their interview process.

##

About the Author

Spencer Kimball is the cofounder and the CEO of Cockroach Labs, where he maintains a delicate balance between his love for programming distributed systems and the excitement of helping the company grow smoothly. He's cut his teeth on databases during the dot com heyday, and had a front row seat at Google for a decade's worth of their evolution.